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Net neutrality faces political, legal hurdles

The FCC and its chairman, Julius Genachowski, are in favor of open Internet rules.

STORY HIGHLIGHTS

The FCC voted this week to proceed with open Internet rules

The commission faces opposition from some in Congress

The debate pits Web companies like Google against providers like AT&T

Legal questions remain about whether the FCC can pass open Internet rules

(CNET) -- Net neutrality supporters may be celebrating the Federal Communications Commission's unanimous vote Thursday to begin developing open Internet regulation, but the battle is far from over as the yet-to-be-written regulation is already facing Congressional opposition and will also likely be challenged in court.

Votes at the FCC for the proposal to get the ball rolling on new rules to protect an open Internet hadn't even been cast when Senator John McCain, a Republican from Arizona, introduced legislation on Thursday morning that would block the agency from regulating the Internet. McCain said that Net neutrality rules would stifle innovation and hurt the job market.

"Today I'm pleased to introduce the Internet Freedom Act of 2009 that will keep the Internet free from government control and regulation," McCain said in a statement. "It will allow for continued innovation that will in turn create more high-paying jobs for the millions of Americans who are out of work or seeking new employment. Keeping businesses free from oppressive regulations is the best stimulus for the current economy."

The FCC voted unanimously Thursday on a proposal that would start the process for creating regulation that will keep the Internet open. The proposal itself uses the FCC's open Internet principles as a foundation and would forbid network operators from restricting access to lawful Internet content, applications, and services. It would also require network providers to allow customers to attach non-harmful devices to the network.

Two additional principles were added, which would prevent network providers from discriminating against particular Internet content or applications, while at the same time allowing for reasonable network management. Internet access providers would also have to be transparent about the network management practices they implement.

All five commissioners voted in favor of advancing the rule-making process with the two Republicans, Meredith Attwell Baker and Robert McDowell, dissenting in part.

Ongoing debate

The so-called Net neutrality debate has pitted Internet application companies, such as Google, Facebook and Skype, against big broadband providers, such as AT&T, Verizon Communications, and Comcast. The network operators argue regulation will stifle innovation, while the Internet companies say an unfettered network is necessary to encourage innovation.

Congress has been interested off and on in this issue for about three years. But it has never gained much support, and at least five bills that would enact Net neutrality regulation have failed.

The issue seemed to die out completely after the FCC publicly admonished Comcast for violating its open Internet principles, which were adopted in 2005. The official slap on the wrist and the public outcry resulted in Comcast changing its practices. For many in the industry, it seemed the FCC's handling of the situation was sufficient.

The issue was revived last year during the U.S. presidential campaign when then-candidate Barack Obama said he'd support Net neutrality regulation and laws. Now that he is president, his supporters are holding him to his promise.

Markey, a senior member and former chairman of the Energy and Commerce Committee's Communications, Technology and the Internet Subcommittee, applauded the FCC's vote on Thursday and said it was an historic step toward preserving "the unfettered and open nature of the Internet."

"These proposed rules are an excellent complement to the Net neutrality legislation that I introduced in Congress earlier this year along with Rep. Anna Eshoo (D-California)," Markey said in a statement. "As the commission's process moves forward, I look forward to working with the FCC and my colleagues in Congress on this vitally important issue."

It's unclear whether either McCain's or Markey's bill would actually pass. Democrats, who have typically supported Net neutrality rules, have seen a break in the ranks with more than 70 House Democrats recently expressing concern over Net neutrality regulations to the FCC.

But there are still supporters for open Internet rules. In September, Chairman of the House Energy & Commerce Committee Henry Waxman, a California Democrat, said he had added himself as a co-sponsor to Markey's bill. Senators Byron Dorgan, (D-North Dakota) and Olympia Snowe (R-Maine) issued a joint statement Thursday reiterating support for Net neutrality rules. And Congresswoman Donna F. Edwards (D-Maryland) also issued a statement supporting the FCC's Net neutrality proposal.

With Congress tackling much bigger issues, such as the economy, health care, and the wars in Iraq and Afghanistan, it's hard to imagine that Net neutrality legislation would be a top legislative priority.

The previous FCC under Chairman Kevin Martin was not interested in creating Net neutrality regulation. But as the new FCC moves forward with its proposal to develop regulations, there's a question over whether the agency even has the authority to regulate the Internet.

At the hearing Thursday, Commissioner McDowell said he was dissenting in part because he didn't feel the FCC had legal authority to create such rules.

"I do not share the majority's view that the Internet is showing breaks and cracks, nor do I believe that the government is the best tool to fix it," he said. "I also disagree with the premise that the commission has the legal authority to regulate Internet network management as proposed."

Even Chairman Julius Genachowski, who introduced the proposal, pointed to the legal gray area that exists when it comes to enacting and enforcing Internet regulation. He said that the commission is faced with a "dangerous combination of an uncertain legal framework with ongoing as well as emerging challenges to a free and open Internet."

But he said the consequences of doing nothing are too great. And "fair and reasonable rules of the road" can't wait.

Still, without any clear direction from Congress, the rules that will result from the FCC's lengthy proposed rule making process will likely be challenged in court.

FCC role in question

The FCC is already defending itself against Comcast's appeal. Comcast is arguing that when the FCC admonished the company for violating its open Internet principles, they were not considered official rules, and therefore the FCC was not able to enforce them. Comcast also argues that the FCC wouldn't need to create official regulation if the principles were enforceable.

But the FCC says that it does have the authority to enforce its policy principles and that the new rules will simply codify these principles.

The outcome of this case is very important, because if the court rules in favor of the FCC, it could add more weight to the FCC's overall argument that it has authority regulate the Internet. And if the court rules in favor of Comcast, and depending on how the decision is written, Net neutrality opponents could use the decision to bolster their argument that the FCC does not have the legal authority to regulate the Internet.

In either case, a clear statute from Congress could settle the matter once and for all.